Base value | Taxable acquisition according to § 10 ErbStG

+/- Correction by § 14 paragraph 1 and 2 ErbStG – Consideration of previous acquisitions by donation and death | Acquisitions within a 10-year period are to be added together, possible allowances in this period only once

– Free amounts according to § 16 ErbStG | Depending on the tax class, up to EUR 500,000 is deducted from the taxable acquisition

– Free amount according to § 17 ErbStG | Applies only in the case of acquisition of death, but can also influence the taxation of a gift via § 14 ErbStG

= basis of assessment of inheritance and gift tax

Taxation according to § 19 (1) ErbStG | Tax rate between 7 % and 50 % applied to the tax base of the gift tax

Observance of the hardship compensation according to § 19 paragraph 3 ErbStG | If a value limit is only minimally exceeded and the tax rate on the entire acquisition increases as a result, the hardship compensation must be observed. The tax is then largely determined on the basis of the more favourable tax rate

Setting the Gift Tax | The tax calculated in accordance with § 19 ErbStG is determined by tax notice (§§ 155, 157 AO).

Value of the taxable person

Acquisition (§ 10)

up to and including

EUR ... | Percentage in tax bracket

I | II | III

75 000 | 7 | 15 | 30

300 000 | 11 | 20 | 30

600 000 | 15 | 25 | 30

6 000 000 | 19 | 30 | 30

13 000 000 | 23 | 35 | 50

26,000,000 | 27 | 40 | 50

over 26,000,000 | 30 | 43 | 50

Value limit according to § 19 paragraph 1 ErbStG in EUR | Hardship compensation according to § 19 paragraph 3 ErbStG if the last previous value limit up to and including EUR ... in tax class

I | II | III

75 000 | – | – | –

300 000 | 82 600 | 87 400 | –

600 000 | 334 200 | 359 900 | –

6,000,000 | 677 400 | 749 900 | –

13 000 000 | 6 888 800 | 6 749 900 | 10 799 900

26 000 000 | 15 260 800 | 14 857 100 | –

over 26,000,000 | 29 899 900 | 28 437 400 | –

Voluntary grants and other comparable legal transactions are subject to gift tax in Germany. It works according to the same principles as the inheritance tax, since the legislature has standardized both taxes together in the inheritance and gift tax law (ErbStG). Especially with regard to tax exemptions and tax classes – and thus also to possible allowances – there are differences.

First principle: What is a gift?

Gifts are subject to gift tax according to § 1 (1) no. 2 ErbStG. § 7 ErbStG regulates what is meant by the term “gift”. Here, the legislator also standardizes which processes are equivalent to a gift and are thus also subject to the gift taxation.

According to § 7 (1) ErbStG, gifts among living persons are, among other things, the following legal transactions: